Core Viewpoint - Korean retail investors are increasingly turning to leveraged VIX (Volatility Index) bets as a strategy to hedge against risks in the U.S. stock market or to speculate on potential market corrections [1][4]. Group 1: Investment Trends - Approximately $130 million has flowed into a 2x long VIX futures ETF, making it one of the most favored U.S.-listed ETFs among Korean investors, accounting for about 20% of the global inflow into this ETF [1]. - This trend follows years of heavy investment in large tech stocks and cryptocurrencies, with many investors preparing for a potential sell-off as U.S. stock valuations approach historical highs [1][4]. - The leveraged VIX ETF has seen a 19% increase this month, although it has declined by 65% within the year [4]. Group 2: Investor Behavior - Korean retail investors, known for their aggressive risk-taking, have previously made significant profits by investing in high-leverage ETFs related to companies like Tesla and Nvidia [1][5]. - The influx of funds into VIX products is seen as a reflection of the investors' enthusiasm for the U.S. market, particularly given their existing long positions in leveraged ETFs [5]. - Public discussions about VIX and leveraged products are prevalent on local social media platforms, with dedicated groups on Kakao Talk discussing these investments [5]. Group 3: Market Dynamics - The surge in investment in volatility products tends to increase the cost of purchasing crash insurance in the VIX futures market, which is significantly smaller than the S&P 500 market [5]. - The use of leveraged securities amplifies both potential gains and losses, with the long-term holding of such products often leading to declines due to the need for constant rebalancing [4][6]. - Experts caution that the current market conditions do not suggest an imminent crash, indicating that investors in leveraged VIX products may face challenges in achieving returns [6].